Dow Jones tumbles 600 points as Trump signals Iran escalation, oil surges

• Trump stated military operations would intensify over 'the next two to three weeks' to bring Iran 'back to the stone ages,' contradicting earlier suggestions of a swift US withdrawal
• Brent crude climbed 7% above $108 per barrel while WTI jumped 12% above $112, boosting energy stocks like Exxon Mobil (+2.5%) and Chevron (+3%)
• Traders now price in zero Fed rate cuts compared to expectations for two cuts before the conflict began, as rising oil prices fuel inflation concerns

Market Summary: Geopolitical Tensions Drive Sharp Selloff

Market Performance:

US equities tumbled Thursday as escalating Middle East tensions triggered risk-off sentiment. The Dow Jones fell 637 points (-1.3%), the S&P 500 declined 1.3%, and the Nasdaq 100 dropped 1.74%. The CBOE VIX index rose to 27.54, signaling heightened investor anxiety.

Key Driver:

President Trump reversed course on Iran conflict expectations, stating military operations would "intensify over the next two to three weeks" after previously suggesting a quick withdrawal. This policy shift dashed hopes for near-term de-escalation and fueled market uncertainty.

Energy Sector Surge:

Oil prices spiked dramatically on geopolitical concerns. Brent crude climbed 7% above $108 per barrel, while WTI crude jumped 12% above $112 per barrel. Energy stocks outperformed with Exxon Mobil and Chevron gaining approximately 2.5% and 3%, respectively.

Monetary Policy Impact:

Rising oil prices shifted Federal Reserve rate expectations. According to CME's FedWatch Tool, traders eliminated all rate cut expectations, down from two anticipated cuts before the conflict began.

Notable Stock Movements:

Globalstar shares rose on speculation of Amazon acquisition talks for the satellite company. SpaceX's confidential IPO filing at a reported $1.75 trillion valuation boosted smaller space-related stocks including Rocket Lab, Planet Labs, and Intuitive Machines.

Economic Data:

Initial jobless claims came in below the 212,000 forecast for the week ended March 28. Friday's nonfarm payrolls report will be released with markets closed for Good Friday.

Broader Context:

March saw the S&P 500 and Nasdaq post their largest monthly losses in a year, while Brent crude recorded its strongest monthly performance on record.